ANZ refunds millions after credit rule breach

ANZ Bank will refund $5.3 million to insurance customers after the corporate watchdog uncovered a series of breaches of credit rules by some of the country’s big car financiers.

The Australian Securities and Investments Commission said today that a review into car financing arrangements had resulted in 15 companies refunding $15 million to more than 30,000 customers.

ANZ’s refund payment was the largest, but other big firms that had breached credit rules included Bank of Queensland, St George, Macquarie, GE and the financing arms of auto companies BMW Australia, Toyota, Nissan and Volkswagen.

According to ASIC, the breaches related to premiums for tyre and rim insurance, which covers motorists against punctures and other types of tyre damage. The watchdog said car insurance premiums can only be paid one year in advance - and exceeding this limit can leave people paying excess interest or locking them in unfairly with one insurer.

The review found the companies had breached this rule, after BMW Finance was last year forced to refund $1.4 million for extending credit to people to pay for tyre insurance for three years.

ASIC deputy chairman Peter Kell signalled the industry had co-operated with the the review and had changed its internal systems. ‘‘These businesses were quick to respond once it was brought to their attention,’’ ASIC deputy chairman Peter Kell said. ‘‘We acknowledge the high degree of co-operation of the car finance industry in bringing about this important result for consumers.’’